Tax sovereignty – ducking and diving

On the day that Alex Cameron QC became the first barrister to be recorded and filmed in an English law court, giving an eloquent and gently earnest display before the Court of Appeal in an effort to secure a reduced sentence for his counterfeiting client, Kevin Fisher, Alex’s brother and Prime Minister David Cameron, gave an equally eloquent if rather more earnest display at the summit of the Open Government Partnership on the subject of tax avoidance and tax evasion.

Ultimately, despite their lofty positions, neither Cameron demonstrated sufficient grasp of the law and relied upon arguments that are completely flawed in the hope people would be taken in by them.

Alex failed to convince the Appellate bench that seven years for his client’s role in what is thought to be the largest ever plot to make fake pound coins in the UK, was unduly harsh and the appeal was thrown out. David? Well, let’s pick up Richard’s summary…

What Mr Cameron cannot do, of course, is admit that he has no strategy whatsoever “to keep corporate taxes coming in”. He cannot admit to the essence of this paper on the Thin Cap Group Litigation, a case which makes it very clear that the EU’s three freedoms – capital, establishment and services – prevent any action on the part of national governments to prevent corporates offshoring their tax liabilities.

The government cannot possibly admit that the losses of such huge sums lost to the taxman are attributable to EU treaty law. Apart from anything else, it would destroy Mr Cameron’s carefully fabricated claims about the benefits of EU membership.

Perhaps the truth of it is that both Camerons understand the law very well indeed. But both of them, in their roles, deployed a mixture of smoke and mirrors, distraction and misdirection in an effort to conceal the reality of the situations from the judges and the British people respectively.

The Camerons, in their separate roles, are simply ducking and diving in a way that would put Del Boy and Rodney to shame. What we have are an extremely wealthy and privileged version of the Trotters, in wigs, gowns and sharp suits.

In very calculated fashion, David Cameron is trying to confuse people, by linking tax avoidance, which is perfectly legal and acceptable, and tax evasion, which is not. By appearing to clamp down on evasion, and further linking it to ‘money laundering’, he is trying to convince us that he getting to grips with public concerns.

But what has been concerning the public is tax avoidance, thanks largely to the demonisation efforts of various parliamentarians and media entities. They see money being earned by huge corporates. They see the revenues exceeding the costs. Then they see little or no corporation tax being paid on the profits made here, because the corporate is structured to pay royalties and levies to another part of the company based elsewhere in the EU – where only then are profits taxed, by that nation’s authorities, with those tax receipts going into that nation’s revenues rather than ours.

The reality is, as part of the European project’s objectives of eroding borders and creating a de facto single state, several freedoms were enshrined. These stop nation states from interfering with a company setting up entities anywhere in today’s EU, moving its money around the EU as it sees fit, and making payments (such as royalities and charges) between its various branches within the EU.

But on this reality, on this explanation as to why Amazon, Google, Starbucks etc, can make large profit on their activities in the UK without the UK Exchequer being able to tax it, David Cameron is doggedly, relentlessly and utterly silent. It is the truth that dare not speak its name. It destroys most of his argument about the economic benefits of EU membership – which are used as justification for accepting the erosion of sovereignty, the erosion of what little democracy we had, and submission to the will of unelected and unaccountable foreign structures and bureaucrats that make our national parliament and local government nothing more than an executive of the EU machine.

Multinational corporations may benefit, but it does little for the UK taxpayer. That isn’t something that plays well with ordinary people, who are expected to bear all the pain and sacrifices that have to be made to ensure the corporations and their political friends can enjoy the fruits of regulation they make in their own interest. That’s an admission Cameron will never make.

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3 Responses to “Tax sovereignty – ducking and diving”

You have to wonder why, given the huge scale of this story, our lamestream media have so completely missed it. Could there really be a concerted effort to keep these facts away from public gaze? An effort which would require so many different (and, in principle, competing) outlets to refrain from telling the truth.

An unpleasant thought occurs to me: The UK grumbling about revenue being taxed elsewhere in the EU could be shaped into an argument for corporation tax harmonisation, or worse, to support corporation tax becoming EU-wide and funding Brussels directly.

Dave’s position of no tax base = no low tax case would support that. Make the tax base massive by applying it to all of the EU.